Rice tariff reduction loss hits over P17 billion

MANILA, Philippines — The government lost at least P17 billion in revenues since it reduced the tariff rate on imported rice to 15 percent in July last year, industry groups claimed.

The Samahang Industriya ng Agrikultura (SINAG) claimed that the government incurred P17.3 billion in forgone revenues since rice tariffs were reduced to 15 percent in July 2024. 

The group disclosed its estimates during the Tariff Commission’s public hearing on SINAG’s petition to revert the rice tariff rate to 35 percent for in-quota and 50 percent for out-quota imports.

During the hearing, the group said the rice tariff cut did not fulfill its promise of bringing down the retail price of the staple. 

SINAG argued that it was government interventions such as the imposition of maximum suggested retail price and declaration of food security emergency that brought down the price of rice in the past months.

Furthermore, the group reiterated its position that the rice tariff cut did more harm than good to both farmers and producers. 

SINAG claimed that the prevailing farmgate price of palay has plunged by 35 percent on an annual basis to P16 per kilo due to the flooding of imported rice in the market.

The group said that palay farmers are not earning a single peso anymore based on the prevailing farmgate price. Worse, the group warned, that the farmgate price is still expected to go down in the coming weeks as the harvest peaks.

SINAG explained that traders and millers are buying palay at a lower price because of the decline in the landed cost of imported rice that is now ranging between P25 and P27 per kilo. 

“By any account or economic indicators, this is a catastrophic drop in the price received by farmers during this period,” the group said.

Meanwhile, the Federation of Free Farmers (FFF) estimated that the government lost P18.12 billion in rice tariff collections from July 2024 until February because of the tariff cut.

“Farmers also lost a similar amount that should have been used to support them,” said Raul Montemayor of FFF.

SINAG noted that the rice tariff cut did not translate to substantial benefit to rice consumers. It noted that well-milled rice prices dropped only by 2.82 percent and regular-milled rice by 4.43 percent, which the group described as “very insignificant.”